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We seem to be Capitalizing more and more these days...

Leases, Software, Leasehold improvements, etc. While the theory does make some sense, that's where it ends. Depreciation/Amortization years are absurd. Book value vs market value doesn't show reality. Many "assets" are discounted by creditors since they are essentially worthless collateral (leasehold improvements in leased property - where's the value?) So does it make your balance sheet better (to capitalize)? I'd say in reality, no. So why are we bent on capitalizing more and more (besides the somewhat obvious tax benefit to the IRS)?


Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

It makes careful reading of the footnotes of great importance.

Just ask the private equity firms like KKR. :-)


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